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>> good morning. i'm stephanie elam and this is a very special edition of "your bottom line." we've team up with the fine folks from cnn i-report to bring you an in-depth look at how the economy is impacting lives all across the country and how you can learn from it. this morning we're taking america's pulse through our i-reporters. we've been following people from around the country who just like you, have had to react to the changing economy. you've got questions. i've got answers. the show that saves you money starts right now. let's get into it because we've got a lot of great advice for you and your family this morning. and by the end of this half hour, you'll be armed with the information you need to make smarter financial decisions. here with us for the entire show is clinical psychologist jeff gardiere and personal financial author and joining us as well is doug flynn of flynn, zito capital management. thank you for joining us here.
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>> thank you. >> i want to go ahead and start this morning with a bit about budgeting. it's a big one. no one wants to talk about it. we really need to. i think a lot of folks really underestimate how important it is. let's get the conversation started. in the midwest, let's listen to this i-report from wisconsin. >> you guys rely on tax time more than any time of the year? >> great for retail store. >> christmas season for a retail store. guy daniels, the owner of expressions ink, a tattoo shop. tell us, tax time, it's way behind us now. what is business looking like these days? >> it tends to slow down about this time of year because people are spending money for their children's school supplies and school clothes. we still stay steady. it's just not as busy as it is during tax season. >> does this mean then you've had to sort of pad your budget so you can make it through the rest of the year?
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>> yeah, we alter our budget a little bit, maybe during tax season we stock up on supplies a little bit, help us through the slow time. >> so, doug, when you hear a story like this when you've got a guy who has a seasonal business, people get their tax return, whahoo, i always wanteda butterfly on my shoulder, if that's the case, what can you do to keep that going through the year? >> people who have flouctuating incomes do have to plan more week to week. what you want to do is have extra cash reserved built up because there could be a point in time when you're going to have to pull from that and during the time when you have extra money, he's doing the right thing, stocking up and putting it away. even out your cash flow to the business. those are some of the things you need to do when you're a business owner. >> you know, when i think about this, jeff, you think about the pressures of being your own boss, right? no matter what the business may be, maybe it's tattoos, maybe you make, you know, flower arrangements, whatever it is. what are some things you can do to fortify not just yourself but
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also your employees? >> i think the important thing in adding on to what doug has said, make a plan. yes, ask consultants just as guy, we're in that position where a lot of times we're not in control of our lives, especially when it comes to income coming in here and there and so on. if you can make that plan and be able to save, and almost track it if not even predict the trends as to where things are going, that can give us more power and power us to be more in control of our lives and of our businesses. >> yeah. and when you take a look at all those things and if you have a little bit of extra money and you want to invest it, that's why guy has been saying, what should he do, carmen? >> folks like guy, you've got to make sure to have the cash reserves. even though you may feel like you're losing money, we are losing money when we put our cash into savings accounts, between taxes and the fact that we're not earning much, you're actually losing money. don't worry about it because you need to protect that cash, the cash is going to protect you down the road. for example, when it's not tax time.
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when people aren't getting their tattoos. in terms of investing. remember when you're self-employed you have tools at your disposal to get tax-friendly investing like a accept, simplified employee pension. think about always setting that up first rather than just putting your money into certain stock investments. you need to protect it from tax reasons. >> guy, just tell us, how do you feel you've done overall with the economy as it's been? how has your business held up in the long view of things? >> i think we've done all right because we've been around so long. i do have a steady customer base. so i think we'll make it through even if it does get a little bit worse because of my reputation. >> and reputation is huge, guy. that's really a big deal. that's something to bank on as well. we wish you the best of luck with your business. thank you for joining us today. thank you, doug, for joining us as well. >> thank you very much. >> all right. up next, meet a man who says sometimes you need to take matters into your own hands. >> i think that when times are
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as rough as they are now with the economy, you really have to, you know, rely on yourself to, you know, to take the extra leap. >> he hasn't gotten a raise or a big bonus check but he's got big plans for helms and his family. you will meet him next. same mes over and over ? ( man ) technology can tell me exactly where i am... but when it comes to my health care, why do i feel so lost ? ( announcer ) we understand your frustration. at unitedhealthcare we believe it should be simpler, and more responsive. we're 78,000 people looking out for 70 million americans. big numbers... but they're what give us the data and the experience to match you with the right doctor for your tricky condition... to guide and stand by you through your toughest medical decisions... to help you manage a chronic condition more on your terms. because in the end, all our innovations... the technology, the numbers... all add up to one thing: treating you like a human being.
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how has the economy affected you? >> the economy has affected me in the hardest way i feel it is in the price of our home. >> and he's probably not alone on that one. mike andrews bought his home at the height of the housing boom, but now his home has lost value so he's waiting for the market to turn around before he sells. mike is joining us now from our washington bureau. and also with us is yahoo! finance columnist laura rally. thank you so much for both being here. this is something a lot of people throughout the country are dealing with. mike, tell me rite right now, what is your work situation like that sn that can be a big problem if you're looking at your home investment. >> absolutely. work situation, i work at a
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public university in maryland. and as a higher education administrator. in the past three years there have been, you know, just your normal cost of living increases, there's been none of that. no merit increases. you know, looking at the budget at the state of maryland. so we're dealing with what we have. you know, whatever you made three years ago is what you're making now. on top of that there's a furlough so we're actually losing our salary as well. so it's difficult. >> all right. let's see if we can get you some advice here. laura, let's take a look at this one. they're looking a the situation. bought the house probably the worst time possible in maryland. should they go ahead and try and sell their house now? >> you have to look at the bigger picture. low crime community, family oriented, good schools. if there's not an immediate need to move, in a school issue, stay put. you see a lot -- because state budgets have been cut, yubtss are cutting back, the job situation is not secure for a lot of 350e78 rigpeople right n.
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i think it's good to stay put for now. >> what about this, mike, tell me, have you been putting a lot of money into the property? >> we have -- we kind of stopped two years ago. but back in maybe 2006 and 7 when we received our tax refund check we would, you know, put in hardwood floors, put in ceiling fans, i trying to do things at the time thinking, in a few years we're going to be leaving here, to invest back in the house. so we've put some resources back in but we've stopped that over the past year or two. >> okay. carmen, tell us about that. a lot of people feel like they have to do a lot of fixing up in order to sell their house. what's the situation? >> mike, stop fixing up. keep it in great shape but don't put any more money in the house. even if you're looking to buy and it's a great buyer's market. coming up against, one, no equity in the home to sale. on the other end when it comes to borrowing, because the income level is where it's at and not a ton of savings, lenders may not want to lend.
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mike has another business, too, five mikes, right? he does speaking engagements and stuff. really go out and find some money there and really encourage people who are finding that their full-time job is not giving them enough money to look at these other wras to bring in money on their free time. >> good thing for everyone to do if they can do it. jeff, what about the psychological thing, when you're sitting there going, i want to move, i want to move, i want to move, i want to go and you can't go. would it be best for them to just go, this is it? >> and this is what i like what mike has done. by the way, i hope he doesn't have multiple personalities with five mikes. but he's not a victim. i can't tell you how many people sit in my therapy office say we're stuck in this house, we paid the highest price and we can't sell it. hess he's saying i like this situation, we're here now, stop putting value in right now but we'll put value in and enjoy this and make it work for us. i like it. he's not thinking like a victim. he's thinking like someone who is a victor. >> feeling empowered, mike? >> yes. >> all right.
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>> thanks. >> just need one mike but you've got fivemikes.com. there you go. >> absolutely. >> thanks for joining us. good luck with your house and the little one and the wife. laura rally, thank you. big dreams and a big lesson for our next guest. >> what i would really like to do is go teach in the high school and contribute, but i can't afford to do that with my family and with two kids going to college and another one coming up. >> tough situation. how do deal with being laid off, next. when you approach things from a different perspective, you don't end up with just another car. you end up with the all-new saab 9-5 luxury sport sedan.
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so what do you do when you lose your job and your kids are counting on you to pay for college? that's the situation that bruce pollard faces.
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here with us in the studio is jack otter, executive editor of mon moneywatch.com. besides the financial aspects, let's talk about personally, what's been the hardest part about being unemployed? >> well, i think for me it's been a little bit of a shift because my wife has gone back to work and i've picked up some of the things my wife is doing. it's a difference in the job effort. >> i can only imagine. and, jeff, you must see this in your dealings day to day for people. is this a tough one for some couples? >> it's a tough one for the guys because they define their ego and who they are, their self worth, by what it is they bring to the table by going out for the kill and bringing it back for people to eat. what i like with what bruce is doing, he's able to redefine a role of what the man does in the family. he has team work with his wife. and is willing to pick up some of the roles that have been traditionally female or that his wife is evens a subscribing to him trying. >> let's take a listen, bruce
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really did open up to our i-reporter about this situation. let's take a listen to what he had to say. >> i don't really know what depression is. i mean, i definitely feel different. i definitely maybe have a little bit bigger problem getting up in the morning. >> i mean, that's so honest, bruce. can you tell us, besides that that part of it, which is a huge part of it, being unemployed, you still have costs. so what is your number one concern? >> i actually have -- i think we have the short-term costs under control. for me it's the longer term costs of the burn rate of my kids' college education and then, also, will i have enough money to retire and not have to go out and find a large high-paying job for the rest of my career here. >> so, yes, let's take a look at that. what does he need to do? >> the very first thing is he needs a number.
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he's floating out there, wondering. we need confidence, even if it's an ugly number at least he knows what he's got to hit. there's online calculators. not 100% accurate. you need inputs, like what is your return in the retirement account. he doesn't know. i don't know. let's say 6% just to get him somewhere. and then figure out what he needs and hen he's got to get a plan for how he's going to get there, however off is h we from that number. i know that the burn rate is his main concern right now, he's got to pay the mortgage, feed his family. but in 20 years it's going to be a lot harder to do that. so how can he get enough money to retire comfortably? >> i think, carmen, in this case, may require being a little bit more creative for bruce, right? >> here's the thing. i would love for bruce to stop worrying so much about the kids' college. >> why should he stop? >> too many parents here because they're caught between worry about the retirement and college. here's the things, kids, you guys have a lot more years to work off debt and to basically get that college degree than dad has to take care of himself. so the question is, do you want
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to take care of dad in the future or do you want to take care of him now? i think bruce needs to focus on himself and on his retirement and securing that and really the kids can get creative with college and put some of the burden on them inside. >> bruce, i hope you got something from this. thank you for sharing your story with us and being so honest. jack, thanks for bringing your expertise with us today. enjoy your birthday weekend. your health is important, that's true, but also expensive. how the you balance your medical bills with your bottom line? in some of nature's best ingredients. that's how we created purina one with smartblend. nutritionally optimized with real salmon, wholesome grains and essential antioxidants, for strong muscles, vital energy, a healthy immune system, and a real difference in your cat. purina one improved with smartblend. discover what one can do. time to face the pollen that used to make me sneeze... my eyes water.
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but now zyrtec®, the fastest 24-hour allergy relief, comes in a liquid gel. zyrtec® liquid gels work fast, so i can love the air®. comes in a liquid gel. in 2008 i quit venture capital to follow my passion for food. i saw a gap in the market for a fresh culinary brand and launched behindtheburner.com. we create and broadcast content and then distribute it across tv, the web and via mobile. i even use the web to get paid. with acceptpay from american express open, we now invoice advertisers and receive payments digitally. and i get paid on average three weeks faster. booming is never looking for a check in the mail. because it's already in my email. step away from the internet. schedule no meetings. hold all your phone calls. for the next hour, there will be no agenda. marie callender's invites you back to lunch, with a new line of fresh recipes. like chicken teriyaki with crisp water chestnuts. it steams to perfection in minutes,
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giving the fresh flavors and textures of a homemade meal. marie's new steamed meals. it's time to savor. :tv] marie's new steamed meals. [humming] ooh! here we go. announcer: you don't have to be perfect to be a perfect parent, because kids in foster care don't need perfection. they need you. here's a sad fact for you. health care costs are the number one reason people go bankrupt in this country. imagine racking up tens of thousand of dollars of medical bills after losing your job. >> that threw a lot, not only physically but emotionally. erupt my confidence. >> jamie smith and her husband is working to dig themselves out of that very situation. jamie is joining us now on the phone from bentonville,
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arkansas, and ryan mack is here with us, president of optimum capital management to discuss this situation. jamie, let me just ask you, what has happened since you've lost your job and these health care costs? have you been able to manage those bills? >> we basically have stuck with the wise decisions that we were trying to make before i call it the economy -- before the recession and everything happened. we make payments in small increments. we've made arrangements with every single provider to whom we owe money. and we are making regular payments. we knew if we kept it small, it would satisfy them that we were trying to pay off the account. an as we pay the smaller ones off, we're adding that amount to the bigger accounts. and just trying to steam roll that a little bit. >> i just want to point out something that you said that was
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really important and it's probably the overarching theme here. she is saying that she and her husband have been proactive about working out paying these bills. and i think a lot of people when they're dealing with these health care issues don't do that and that's where yh they take a. >> they've obviously budgeted and figured out what is my smallest amount that we owe, let me put to the next piece and continue to move forward. so i definitely think she's being very responsible. on the other side, what sort of programs are do thcome they hav area. i mow in arkansas they have the comprehensive health insurance pool that you can figure out by your state to make sure what plans they have in your other to cope with the health care expenses. >> and jamie, you can tell us also as far as bringing in
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money, what else have you been doing to find ways to generate revenue? >> well, actually, since i got sick, i've not really being doing it, but i was doing some freelance writing and event planning, trying to do my skills in a variety of ways. but also obviously i am looking for a full-time job. but just trying to do a little bit of freelance work. which i was also doing while i was employed. when you no longer have a job, you have more time for freelance, i guess you could put it that way. >> so someone in jamie's situation with what she's been trying to do, what are some of the other things that she can help? >> she's utilizing all the right things, things that a lot of folks really need to realize. when you get a bill from the doctor or hospital, do not pay what it says there on the bill. you don't have to.
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you need to ghoenegotiate the b down. that's different rates. they charge different rates based if you have insurance or you don't. and about if you don't of course they're going to charge you the most, so you really have a lot of room to negotiate. and she's working with them to have a payment plan that works with their budget right now. never charge any of this, net put any of it on your credit cards. that's all she can do is manage the debts wisely and don't be afraid to talk to them. you will get out eventually, but it's all negotiable. >> and right now health care reform won't help her because it's not until 2013. what should she do to keep her spirits up? >> and i love that question because it it is about keeping your spirits up so you can keep your emotional immune system going. she already has health issues. she's already sick. so what she's doing is by talking to the people she owes money, she's staying on top of the situation and keeping that incredible stress at a minimum by being in charge of a situation and being a player in her own financial issues.
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>> so keep it up. jamie's notebook.com is where you've been writing. keep up what you've been doing and best of luck to you and your husband. are you having a hard it time finding a job? starting your own business could be the solution. a secret plan to smart business success next. it's morning... ♪ and morning is amazing. ♪ it's when we charge into the future. ♪ when we blasted off for the moon. scaled the highest peak. and flew for the very first time. morning starts and changes everything. ♪ it's a clean slate. a fresh start. so come dreamers. and trailblazers. champions. come builders.
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it's morning. ♪ wake up. and be amazing. does your breakfast make you amazing? ♪
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unemployment is sky high. and in times like these, the american economy needs small businesses to help bring us back from the brink. one husband and wife team think they have it all figured out. >> we provide a very valuable service and it's all about our people. and if our service isn't immaculate and perfect, then we
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feel that, you know, we can't serve the customer the way we'd like to. >> so along with his wife, david started a line of lingerie stores called intimacy and he joins uses now via skype. we also have rod kurtz. and i need to know, this is the big question, how the heck have you guys been able to grow despite what's been going on with the economy? >> that's a good question. you know, what happened, it was about ten years ago, it was 2001, i had been working for a fortune 500 company and they gave me an ultimatum to move to singapore and my oldest daughter was just about to be a senior in high school so it wasn't possible. my wife who had started intimacy said why don't we work together and try to make something out of this. and i've always been passionate about being an entrepreneur. and i really wanted to be part of bringing that back to the landscape of america.
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so the two of us really paired up and what really made it a difference for us and i encourage all other entrepreneurs across the country is that as a husband and wife team, my wife started the business, she was the founder, so when i came on board, she was already running the show, but you can't really build the business excellence you want if you're kind of a one man show. and while she had some employee, she really needed a partner. >> so let's stop this because i want to point out some of the things that you said that are really good things. and i think what we're hearing is that they found out what were their strengths and what they were good at so that they could really focus on that. p. >> and i think we're also hearing that lingerie is expansion proof. women like wearing it and guys like women wearing it. but they're hitting on important points. service is essential. consumers need no extra excuse not shop someplace. i talk to a lot of entrepreneurs, it's a great time to expand. if you have a good business model, real estate is chip eap,
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more employ yeees available if cheaper. >> people like to think that the behemoth companies are the ones that employer america, but it's really small differences that is driving it. >> i just want to caution david a little bit and i love all the confidence, i love the things going great, but as a small business other than, you really have to be careful about making sure to put away a lot of cash. we're talking about a year's worth of cash or so. for example, my brother is a small business owner, he put away a ton of cash thank goodness because he's had pay his employees and run the business for a year. you have to keep the business going, you have to be careful with that cash and protect it. and also be careful about over extending too much, getting too excited about the business. try to go thin small steps and advice on how you're doing.

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Your Bottom Line
CNN September 4, 2010 9:30am-10:00am EDT

News/Business. Financial advice.

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